96-022

Response January 26, 1996

Request

January 26, 1996

Re: Historic Preservation Tax Credit.

Dear XXXXX,

We have prepared a response to the attached letter from XXXXX, but you asked a different question that has not been answered in this response. Therefore, we are addressing your question separately.

You asked if the Auditing should always accept certification by the State Historic Preservation Office as ample evidence that a project qualifies for the Historic Preservation Credit. Our response is “yes.” Section 59-10-108.5 of the Utah Code, directed the Tax Commission to work with the Division of state History to develop processes for verifying which construction projects qualify for the tax credit. Administrative Rule R865-I9-41 outlines our agreement that the Historic Preservation Office will certify projects for the tax credit. The Historic Preservation Office certifies the project by issuing it a unique project number and completing the Historic Preservation Credit form (TC-40H). XXXXX of the Historic Preservation Office assures us that certification numbers are not issued for nonqualifying projects.

XXXXX mentioned that blank TC-40H are available in libraries, so it is worth mentioning that the form must be signed by an authorized Historic Preservation Office employee. The signature on the form should be followed by a UT-SHPO logo which is stamped on the signature line. (Refer to XXXXX form to see the logo stamp).

We understand your concern that a taxpayer's construction project may not qualify as rehabilitation or preservation, but we feel that the Historic Preservation Office is better equipped to make that determination than the Tax Commission.

For the Commission,

Alice Shearer,

Commissioner

January 26, 1996

XXXXX

RE: Advisory Opinion Historic Preservation Tax Credit

Dear XXXXX,

We have received your request for an advisory opinion regarding the historic preservation tax credit. We find as follows:

Utah law allows as a credit against income tax 20% of qualified expenditures to rehabilitate certified historic residential buildings. To qualify, the building must be listed on the National Register of Historic Places or designated by the Division of state History as historically significant to the district. The expenditures must amount to more than $10,000 and they must have been used to rehabilitate or restore the physical elements of the building, but not merely to enlarge the existing building. Finally, the rehabilitation must be approved by the state Historic Preservation Officer who will assign the work a unique certification number.

From the facts presented in your letter, the construction on your back porch qualifies for a tax credit of 20% of $$$$$.

For the Commission,

Alice Shearer

Commissioner